Jeff Mortimer, chief investment officer at Charles Schwab Investment Management, said investors should buy financial stocks in 2010, CNBC reported.
“We think that the market is dependent upon what the (earnings) are next year,” he said.
Mortimer said investors should not leave financials out of their portfolios.
“What I worry about the individual investor is that they’re underweight perhaps (on) financials,” he said.
“A lot of taint has been put on that sector of the market...(but) individuals should make sure that they get to a market weight of 10 to 15 percent ... even though it doesn’t appear that you want to own them.”
Investors should not fear financial stocks because of recent history, he said.
Mortimer said that even though the stock market comeback appears to be “violent,” their current valuation is fair since the economy is rebounding from a recession.
He said the current rally has not been “too far, too fast.”
Some investors are still pulling out of financial stocks, Reuters reported.
"Volumes are low so you tend to get some spikes here and there. People are still getting out of banks," said Joshua Raymond, market strategist at City Index.
"A lot of people are just winding down their positions and will come back in the New Year,” he said.
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